Living on Pretax Dollars in a Post Tax World, Part Two - Maximize Legitimate Tax Deductions

Could you use more tax deductions? How about a lot more tax deductions? Read on to find out what it takes to maximize your tax savings -- legitimately -- so you too can live on pretax dollars in a post-tax world. The first step you'll have to take is start a business. Your business is basically the ticket to legitimate tax deductions. Since a lot of the things you'll do as part of simply living your life also involve your business, it doesn't take a whole lot of tweaking to run a lot of your expenses through your business. And yes, those will be totally legitimate deductions. So here's what having a business will allow you to do, once you've formalized your company. First of all, if you work out of your home, you can actually deduct part of your living space expenses. That's because you can now have a home office. This means that you can deduct a variety of expenses in connection with your home office. Specifically, if you have debt on your home for example, you can start by writing part of that off as tax deductions. You can also write off part of the depreciation of your home. You can write off part of your utilities bills as well as your phone bills. You could even write off a lot of electronics bills which relate to your business. If you use your car for business, your car insurance can be pretax as you run it through your company. Your car payments can also be run through the company. The same is true for your car and business related insurance bills. In effect, you can knock your bills down by whatever your tax bracket is. So in California, your tax between state and federal alone could push 40%. Even in Nevada, where there are no state taxes, you'd still pay federal taxes. So you could still be looking at a 31% tax break on the top rates. And it's pretty obvious that every time you can cut your bills by 30 %, it will make a dramatic difference in your pocketbook. So if you feel like you don't have the money to invest in growing your wealth, just take a close look at how much you pay in taxes -- and how much you would have to pay in taxes if you had your own business. You'll probably discover a huge difference. And it's not all just about saving taxes either. Starting a business does some very positive things for you. One of the most important ones is that it gives you a fresh start. It allows you to create things you want to do. It allows you to have more control over your life. And, of course, you can immediately receive income tax benefits that have a direct impact on your cash flow that can be rather dramatic.